Intrinsic value of Melco Resorts&Entertainment ADR - MLCO

Previous Close

$17.13

  Intrinsic Value

$39.62

stock screener

  Rating & Target

str. buy

+131%

Previous close

$17.13

 
Intrinsic value

$39.62

 
Up/down potential

+131%

 
Rating

str. buy

We calculate the intrinsic value of MLCO stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 8.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  16.90
  15.71
  14.64
  13.68
  12.81
  12.03
  11.32
  10.69
  10.12
  9.61
  9.15
  8.73
  8.36
  8.02
  7.72
  7.45
  7.21
  6.98
  6.79
  6.61
  6.45
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
  5.56
Revenue, $m
  6,178
  7,149
  8,195
  9,316
  10,509
  11,773
  13,106
  14,507
  15,976
  17,511
  19,113
  20,782
  22,520
  24,327
  26,206
  28,158
  30,187
  32,295
  34,487
  36,766
  39,136
  41,602
  44,170
  46,844
  49,631
  52,537
  55,567
  58,730
  62,032
  65,482
Variable operating expenses, $m
  4,182
  4,821
  5,510
  6,248
  7,034
  7,867
  8,745
  9,668
  10,635
  11,646
  12,588
  13,688
  14,832
  16,022
  17,260
  18,546
  19,882
  21,270
  22,714
  24,215
  25,776
  27,400
  29,091
  30,853
  32,688
  34,602
  36,598
  38,681
  40,856
  43,128
Fixed operating expenses, $m
  1,129
  1,154
  1,180
  1,205
  1,232
  1,259
  1,287
  1,315
  1,344
  1,374
  1,404
  1,435
  1,466
  1,499
  1,532
  1,565
  1,600
  1,635
  1,671
  1,708
  1,745
  1,784
  1,823
  1,863
  1,904
  1,946
  1,989
  2,032
  2,077
  2,123
Total operating expenses, $m
  5,311
  5,975
  6,690
  7,453
  8,266
  9,126
  10,032
  10,983
  11,979
  13,020
  13,992
  15,123
  16,298
  17,521
  18,792
  20,111
  21,482
  22,905
  24,385
  25,923
  27,521
  29,184
  30,914
  32,716
  34,592
  36,548
  38,587
  40,713
  42,933
  45,251
Operating income, $m
  867
  1,173
  1,505
  1,862
  2,242
  2,647
  3,074
  3,524
  3,997
  4,491
  5,121
  5,660
  6,221
  6,806
  7,414
  8,047
  8,705
  9,390
  10,102
  10,843
  11,615
  12,418
  13,256
  14,129
  15,039
  15,989
  16,981
  18,017
  19,099
  20,231
EBITDA, $m
  1,558
  1,955
  2,385
  2,846
  3,338
  3,861
  4,413
  4,994
  5,604
  6,242
  6,909
  7,604
  8,328
  9,082
  9,866
  10,681
  11,529
  12,411
  13,328
  14,283
  15,276
  16,310
  17,388
  18,511
  19,682
  20,903
  22,179
  23,511
  24,902
  26,357
Interest expense (income), $m
  210
  224
  282
  346
  415
  489
  568
  651
  739
  831
  928
  1,029
  1,135
  1,245
  1,360
  1,479
  1,602
  1,731
  1,865
  2,004
  2,148
  2,298
  2,455
  2,617
  2,786
  2,963
  3,146
  3,338
  3,538
  3,746
  3,964
Earnings before tax, $m
  643
  891
  1,159
  1,446
  1,753
  2,079
  2,423
  2,785
  3,165
  3,563
  4,091
  4,525
  4,976
  5,447
  5,936
  6,445
  6,974
  7,525
  8,098
  8,695
  9,316
  9,964
  10,639
  11,342
  12,076
  12,843
  13,643
  14,479
  15,353
  16,267
Tax expense, $m
  174
  241
  313
  390
  473
  561
  654
  752
  855
  962
  1,105
  1,222
  1,344
  1,471
  1,603
  1,740
  1,883
  2,032
  2,187
  2,348
  2,515
  2,690
  2,872
  3,062
  3,261
  3,468
  3,684
  3,909
  4,145
  4,392
Net income, $m
  469
  650
  846
  1,056
  1,280
  1,518
  1,769
  2,033
  2,311
  2,601
  2,987
  3,303
  3,633
  3,976
  4,333
  4,705
  5,091
  5,493
  5,912
  6,347
  6,801
  7,274
  7,766
  8,280
  8,816
  9,375
  9,959
  10,570
  11,208
  11,875

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  10,401
  12,035
  13,796
  15,683
  17,692
  19,819
  22,064
  24,423
  26,895
  29,479
  32,177
  34,987
  37,912
  40,955
  44,117
  47,404
  50,820
  54,369
  58,059
  61,895
  65,885
  70,037
  74,360
  78,862
  83,554
  88,445
  93,548
  98,872
  104,432
  110,239
Adjusted assets (=assets-cash), $m
  10,401
  12,035
  13,796
  15,683
  17,692
  19,819
  22,064
  24,423
  26,895
  29,479
  32,177
  34,987
  37,912
  40,955
  44,117
  47,404
  50,820
  54,369
  58,059
  61,895
  65,885
  70,037
  74,360
  78,862
  83,554
  88,445
  93,548
  98,872
  104,432
  110,239
Revenue / Adjusted assets
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
Average production assets, $m
  7,339
  8,492
  9,736
  11,067
  12,484
  13,986
  15,570
  17,234
  18,979
  20,803
  22,706
  24,689
  26,754
  28,901
  31,132
  33,452
  35,862
  38,367
  40,970
  43,678
  46,493
  49,423
  52,474
  55,651
  58,962
  62,413
  66,014
  69,772
  73,695
  77,792
Working capital, $m
  -1,532
  -1,773
  -2,032
  -2,310
  -2,606
  -2,920
  -3,250
  -3,598
  -3,962
  -4,343
  -4,740
  -5,154
  -5,585
  -6,033
  -6,499
  -6,983
  -7,486
  -8,009
  -8,553
  -9,118
  -9,706
  -10,317
  -10,954
  -11,617
  -12,308
  -13,029
  -13,781
  -14,565
  -15,384
  -16,239
Total debt, $m
  4,870
  5,973
  7,162
  8,435
  9,791
  11,227
  12,742
  14,335
  16,003
  17,748
  19,569
  21,466
  23,440
  25,494
  27,629
  29,847
  32,153
  34,549
  37,039
  39,628
  42,322
  45,125
  48,042
  51,081
  54,248
  57,550
  60,994
  64,588
  68,341
  72,260
Total liabilities, $m
  7,020
  8,123
  9,312
  10,586
  11,942
  13,378
  14,893
  16,485
  18,154
  19,899
  21,719
  23,616
  25,591
  27,644
  29,779
  31,998
  34,303
  36,699
  39,190
  41,779
  44,473
  47,275
  50,193
  53,232
  56,399
  59,701
  63,145
  66,739
  70,491
  74,411
Total equity, $m
  3,380
  3,911
  4,484
  5,097
  5,750
  6,441
  7,171
  7,937
  8,741
  9,581
  10,457
  11,371
  12,321
  13,310
  14,338
  15,406
  16,516
  17,670
  18,869
  20,116
  21,413
  22,762
  24,167
  25,630
  27,155
  28,745
  30,403
  32,134
  33,940
  35,828
Total liabilities and equity, $m
  10,400
  12,034
  13,796
  15,683
  17,692
  19,819
  22,064
  24,422
  26,895
  29,480
  32,176
  34,987
  37,912
  40,954
  44,117
  47,404
  50,819
  54,369
  58,059
  61,895
  65,886
  70,037
  74,360
  78,862
  83,554
  88,446
  93,548
  98,873
  104,431
  110,239
Debt-to-equity ratio
  1.440
  1.530
  1.600
  1.650
  1.700
  1.740
  1.780
  1.810
  1.830
  1.850
  1.870
  1.890
  1.900
  1.920
  1.930
  1.940
  1.950
  1.960
  1.960
  1.970
  1.980
  1.980
  1.990
  1.990
  2.000
  2.000
  2.010
  2.010
  2.010
  2.020
Adjusted equity ratio
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  469
  650
  846
  1,056
  1,280
  1,518
  1,769
  2,033
  2,311
  2,601
  2,987
  3,303
  3,633
  3,976
  4,333
  4,705
  5,091
  5,493
  5,912
  6,347
  6,801
  7,274
  7,766
  8,280
  8,816
  9,375
  9,959
  10,570
  11,208
  11,875
Depreciation, amort., depletion, $m
  691
  782
  880
  984
  1,096
  1,214
  1,339
  1,470
  1,607
  1,751
  1,788
  1,944
  2,107
  2,276
  2,451
  2,634
  2,824
  3,021
  3,226
  3,439
  3,661
  3,892
  4,132
  4,382
  4,643
  4,914
  5,198
  5,494
  5,803
  6,125
Funds from operations, $m
  1,160
  1,432
  1,725
  2,040
  2,376
  2,732
  3,108
  3,503
  3,918
  4,352
  4,775
  5,247
  5,739
  6,252
  6,785
  7,339
  7,915
  8,514
  9,138
  9,787
  10,462
  11,165
  11,898
  12,662
  13,458
  14,290
  15,157
  16,064
  17,011
  18,001
Change in working capital, $m
  -221
  -241
  -260
  -278
  -296
  -313
  -331
  -348
  -364
  -381
  -397
  -414
  -431
  -448
  -466
  -484
  -503
  -523
  -544
  -565
  -588
  -612
  -637
  -663
  -691
  -721
  -752
  -784
  -819
  -855
Cash from operations, $m
  1,382
  1,673
  1,985
  2,318
  2,672
  3,045
  3,438
  3,851
  4,282
  4,733
  5,172
  5,661
  6,170
  6,700
  7,250
  7,823
  8,418
  9,037
  9,681
  10,352
  11,050
  11,777
  12,535
  13,325
  14,149
  15,010
  15,909
  16,848
  17,830
  18,856
Maintenance CAPEX, $m
  -494
  -578
  -669
  -767
  -871
  -983
  -1,101
  -1,226
  -1,357
  -1,494
  -1,638
  -1,788
  -1,944
  -2,107
  -2,276
  -2,451
  -2,634
  -2,824
  -3,021
  -3,226
  -3,439
  -3,661
  -3,892
  -4,132
  -4,382
  -4,643
  -4,914
  -5,198
  -5,494
  -5,803
New CAPEX, $m
  -1,061
  -1,153
  -1,243
  -1,331
  -1,417
  -1,501
  -1,584
  -1,665
  -1,745
  -1,824
  -1,903
  -1,983
  -2,064
  -2,147
  -2,232
  -2,319
  -2,410
  -2,505
  -2,604
  -2,707
  -2,816
  -2,930
  -3,050
  -3,177
  -3,311
  -3,452
  -3,601
  -3,758
  -3,923
  -4,098
Cash from investing activities, $m
  -1,555
  -1,731
  -1,912
  -2,098
  -2,288
  -2,484
  -2,685
  -2,891
  -3,102
  -3,318
  -3,541
  -3,771
  -4,008
  -4,254
  -4,508
  -4,770
  -5,044
  -5,329
  -5,625
  -5,933
  -6,255
  -6,591
  -6,942
  -7,309
  -7,693
  -8,095
  -8,515
  -8,956
  -9,417
  -9,901
Free cash flow, $m
  -174
  -58
  73
  220
  383
  561
  753
  960
  1,181
  1,414
  1,631
  1,890
  2,162
  2,446
  2,743
  3,052
  3,374
  3,709
  4,057
  4,419
  4,795
  5,186
  5,593
  6,016
  6,457
  6,916
  7,394
  7,893
  8,413
  8,956
Issuance/(repayment) of debt, $m
  1,013
  1,103
  1,189
  1,273
  1,356
  1,436
  1,515
  1,592
  1,669
  1,745
  1,821
  1,897
  1,975
  2,054
  2,135
  2,219
  2,305
  2,396
  2,490
  2,589
  2,693
  2,803
  2,918
  3,039
  3,167
  3,302
  3,444
  3,594
  3,753
  3,920
Issuance/(repurchase) of shares, $m
  23
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,036
  1,103
  1,189
  1,273
  1,356
  1,436
  1,515
  1,592
  1,669
  1,745
  1,821
  1,897
  1,975
  2,054
  2,135
  2,219
  2,305
  2,396
  2,490
  2,589
  2,693
  2,803
  2,918
  3,039
  3,167
  3,302
  3,444
  3,594
  3,753
  3,920
Total cash flow (excl. dividends), $m
  862
  1,045
  1,262
  1,494
  1,739
  1,997
  2,268
  2,552
  2,849
  3,159
  3,451
  3,787
  4,137
  4,500
  4,878
  5,271
  5,679
  6,105
  6,547
  7,008
  7,488
  7,989
  8,511
  9,055
  9,624
  10,217
  10,838
  11,487
  12,165
  12,875
Retained Cash Flow (-), $m
  -493
  -531
  -573
  -613
  -653
  -692
  -729
  -767
  -803
  -840
  -877
  -913
  -951
  -989
  -1,028
  -1,068
  -1,110
  -1,154
  -1,199
  -1,247
  -1,297
  -1,349
  -1,405
  -1,463
  -1,525
  -1,590
  -1,658
  -1,731
  -1,807
  -1,887
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  370
  514
  690
  880
  1,086
  1,305
  1,539
  1,786
  2,046
  2,319
  2,575
  2,874
  3,186
  3,511
  3,850
  4,203
  4,569
  4,951
  5,348
  5,761
  6,191
  6,639
  7,106
  7,592
  8,099
  8,628
  9,180
  9,756
  10,358
  10,988
Discount rate, %
  4.80
  5.04
  5.29
  5.56
  5.83
  6.13
  6.43
  6.75
  7.09
  7.45
  7.82
  8.21
  8.62
  9.05
  9.50
  9.98
  10.48
  11.00
  11.55
  12.13
  12.74
  13.37
  14.04
  14.74
  15.48
  16.25
  17.07
  17.92
  18.82
  19.76
PV of cash for distribution, $m
  353
  465
  591
  709
  818
  914
  995
  1,059
  1,104
  1,131
  1,125
  1,115
  1,087
  1,044
  986
  917
  840
  756
  670
  584
  499
  420
  346
  280
  222
  172
  130
  97
  70
  49
Current shareholders' claim on cash, %
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7

Melco Resorts & Entertainment Limited, formerly Melco Crown Entertainment Limited, is a holding company. The Company, through its subsidiaries, develops, owns and operates casino gaming and entertainment casino resort facilities in Asia. It is principally engaged in the gaming and hospitality business in Asia and its principal operating and developmental activities occur in over two geographic areas, which include Macau and the Philippines. Its segments include City of Dreams, Altira Macau, Studio City, Mocha Clubs, City of Dreams Manila, and Corporate and Others. It has over three casino based operations in Macau, namely, City of Dreams, Altira Macau and Studio City, and non-casino based operations in Macau at its Mocha Clubs. It also has a casino based operation in the Philippines, City of Dreams Manila. It is developing the fifth hotel tower at City of Dreams in Cotai, Macau. Its other operations also include Taipa Square Casino, Macau operating within Hotel Taipa Square.

FINANCIAL RATIOS  of  Melco Resorts&Entertainment ADR (MLCO)

Valuation Ratios
P/E Ratio 142.6
Price to Sales 5.6
Price to Book 7.5
Price to Tangible Book
Price to Cash Flow 21.7
Price to Free Cash Flow 70.1
Growth Rates
Sales Growth Rate 13.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -66.7%
Cap. Spend. - 3 Yr. Gr. Rate -11.2%
Financial Strength
Quick Ratio 24
Current Ratio 0
LT Debt to Equity 117.6%
Total Debt to Equity 120%
Interest Coverage 1
Management Effectiveness
Return On Assets 3.7%
Ret/ On Assets - 3 Yr. Avg. 4.4%
Return On Total Capital 2.2%
Ret/ On T. Cap. - 3 Yr. Avg. 3.8%
Return On Equity 4.6%
Return On Equity - 3 Yr. Avg. 7.1%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 31.1%
Gross Margin - 3 Yr. Avg. 30.4%
EBITDA Margin 18.5%
EBITDA Margin - 3 Yr. Avg. 17.4%
Operating Margin 7.5%
Oper. Margin - 3 Yr. Avg. 8%
Pre-Tax Margin 1.7%
Pre-Tax Margin - 3 Yr. Avg. 3.7%
Net Profit Margin 3.9%
Net Profit Margin - 3 Yr. Avg. 6.4%
Effective Tax Rate 10.7%
Eff/ Tax Rate - 3 Yr. Avg. 3.2%
Payout Ratio 219.3%

MLCO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MLCO stock intrinsic value calculation we used $5284.823 million for the last fiscal year's total revenue generated by Melco Resorts&Entertainment ADR. The default revenue input number comes from 0001 income statement of Melco Resorts&Entertainment ADR. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our MLCO stock valuation model: a) initial revenue growth rate of 16.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.8%, whose default value for MLCO is calculated based on our internal credit rating of Melco Resorts&Entertainment ADR, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Melco Resorts&Entertainment ADR.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of MLCO stock the variable cost ratio is equal to 68%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1105 million in the base year in the intrinsic value calculation for MLCO stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.8% for Melco Resorts&Entertainment ADR.

Corporate tax rate of 27% is the nominal tax rate for Melco Resorts&Entertainment ADR. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the MLCO stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for MLCO are equal to 118.8%.

Life of production assets of 12.7 years is the average useful life of capital assets used in Melco Resorts&Entertainment ADR operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for MLCO is equal to -24.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2887.551 million for Melco Resorts&Entertainment ADR - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 494.333 million for Melco Resorts&Entertainment ADR is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Melco Resorts&Entertainment ADR at the current share price and the inputted number of shares is $8.5 billion.

RELATED COMPANIES Price Int.Val. Rating
LVS Las Vegas Sand 53.73 62.16  hold
WYNN Wynn Resorts 106.40 52.00  str.sell
MGM MGM Resorts In 26.40 38.57  buy

COMPANY NEWS

▶ Melco Announces Earnings Release Date   [Nov-06-18 06:59AM  GlobeNewswire]
▶ Macau casinos post Sept revenues of $2.73 bln   [Oct-01-18 01:25AM  Reuters]
▶ 3 Surprisingly Strong Dividend Stocks   [Sep-10-18 08:32AM  Motley Fool]
▶ 4 Casino Stocks That Are Roaring Higher   [Sep-05-18 12:06PM  InvestorPlace]
▶ Casinos to Start Jockeying for Japan's 3 New Licenses   [Aug-08-18 10:16PM  Motley Fool]
▶ Melco Resorts Shrinking in Critical Macau Market   [Jul-29-18 05:02PM  Motley Fool]
▶ Melco's Ho Says He's Seeking Partnerships for Japan IR Bids   [Jul-26-18 09:59PM  Bloomberg Video]
▶ Melco: 2Q Earnings Snapshot   [08:26AM  Associated Press]
▶ Why Wynn Resorts Will Be the Biggest Winner in Macau   [Jul-20-18 02:40PM  Motley Fool]
▶ Melco Announces Earnings Release Date   [07:36AM  GlobeNewswire]
▶ 3 Casino Stocks Ready for Big Rebounds   [Jul-17-18 06:00AM  Investopedia]
▶ Casino Stocks: Time to Roll the Dice on MGM, Wynn, Melco   [Jul-09-18 12:33PM  Barrons.com]
▶ 3 Casino Stocks to Buy Now   [Jun-22-18 01:04PM  InvestorPlace]
▶ 3 Casino Stocks to Buy Now   [Jun-21-18 06:07PM  Zacks]
▶ Grand Opening of Morpheus celebrated in Macau   [Jun-15-18 12:27PM  GlobeNewswire]
▶ 3 Casino Stocks to Buy Now   [May-24-18 12:40PM  InvestorPlace]
▶ 3 Casino Stocks to Buy Now   [May-23-18 03:55PM  Zacks]
▶ 5 Stocks With Recent Price Strength to Boost Your Portfolio   [May-14-18 01:55PM  InvestorPlace]
▶ Melco Resorts Beats Q1 Earnings Views, Misses On Revenue   [09:36AM  Investor's Business Daily]
▶ Melco Resorts' Ho Says Macau Is Growing 'North of 20%'   [May-01-18 06:38PM  Bloomberg Video]
▶ Melco Announces Earnings Release Date   [Apr-26-18 06:53AM  GlobeNewswire]
▶ Melco partners with Garena to bring eSports to Macau   [Apr-23-18 09:01AM  GlobeNewswire]
▶ Melco Resorts May Have an Edge in Japan Casino Bidding   [Apr-22-18 07:20AM  Motley Fool]
▶ Macau casino revenue rises 5.7 pct in Feb   [Mar-01-18 12:08AM  Reuters]

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